GMT+8( BJT)

Market backs Beijing plan for appliance sales, recycling

Market feedback on notices just released by China’s National Development and Reform Commission (NDRC) on boosting home appliance sales and improving the recycling system for old appliances show the country’s determination to support the white goods sector and accelerate the pace of ‘green’ development.
The announcements released by NDRC on May 18 and 19 respectively encourage electric home appliance manufacturers and dealers to cooperate with e-commerce platforms and to introduce more trade-in policies so as to expedite appliance upgrading and popularize old-for-new services among consumers.

“China’s white goods industry has been in oversupply since 2019, and things will get worse this year given the unforeseeable jolt from the COVID-19 pandemic,” a Beijing-based market analyst said. “The impact to our appliance exports has yet to emerge so far, but I believe exports will significantly decline starting Q2,” he added.

Over January-April, data from China’s National Bureau of Statistics (NBS) showed that production of air-conditioners, for example, plunged by 24.8% on year to 55.8 million units, as Mysteel Global reported. 

Air-conditioner sales in the first four months declined by 27.8% on year to 42.5 million units, among which domestic sales dropped dramatically by 44.7% on year to 17.9 million units while exports only decreased 7.2% on year to 24.6 million units, according to data from Chinaiol, a home appliance industry platform.

“Given the sluggish global demand due to the virus, it’s no surprise that China is introducing stimulus policies for the white goods industry, one of the country’s pillar industries and a major source of employment,” the Beijing analyst stated. Over January-April, 3.54 million new jobs were added in cities and towns nationwide, some 1.05 million fewer than during the first four months of last year. In April alone, China’s official unemployment rate grew 0.1 percentage point on month to 6%, the NBS data showed.

China will also build a more sound system for collecting, separating and recycling old home appliances, Mysteel Global learned from the NDRC notices. As part of this, the government plans to the offer of subsidies to those recycling enterprises demonstrating an ongoing commitment to protecting the environment. Should such firms lapse in their determination, the subsidies would be allocated to others considered more worthy, the notices indicated. 

“There will be two major methods to perfect the system; one is to promote the further involvement of dealers in the system, which will largely save costs. The other is to offer subsidies to recycling companies as they might pass some of the subsidies to end-users to encourage them to scrap old appliances,” the Beijing expert pointed out.

Another Shanghai-based market insider said that any progress with the recycling system would help improve domestic steel scrap quality, but there were still difficulties in implementation. 

“Steel scrap of low quality might hurt steelmaking facilities and steel mills always hope that domestic scrap to be standardized, but I think more time is needed,” she said. “Subsidies are attractive to enterprises, but the (environmental) requirements companies must satisfy to receive them will be very strict,” she added.

Written by Anna Wu, wub@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com